Centralized partnership audit regime changes proposed
The IRS issued rules on two special enforcement matters for purposes of the unified partnership audit rules.
Partnership and LLC Taxation
Partnerships and S corps. can deduct state and local taxes
The IRS said it would issue proposed regulations allowing S corporations and partnerships to deduct “specified income tax payments” paid to state and local governments above the line and not as passthrough items for partners and shareholders.
IRS proposes rules on carried interests
The IRS issued proposed regulations under Sec. 1061, enacted by the TCJA, which requires owners of certain partnership interests to hold them for three years to be eligible for capital gain treatment.
Settlement offers for pending litigation of syndicated conservation easements
The IRS announced time-limited settlement offers, requiring tax benefit concessions and assessing penalties, to eligible taxpayers with pending cases.
Draft instructions for partnership capital account reporting released
The IRS released draft instructions for Form 1065, U.S. Return of Partnership Income, to calculate partner capital accounts using the tax-basis method.
Rules govern withholding on transfers of partnership interests and ECI
The IRS finalized proposed regulations on withholding from transfers of partnership interests to foreign persons and the definition of effectively connected income for those purposes.
Divorce settlement payments do not increase LLC basis
Payments to ex-wife and divorce lawyer do not increase taxpayer’s basis in an LLC.
Economic issues when forming an LLC
A number of issues must be considered when reviewing the organizational documents for a limited liability company, including member compensation, allocation of income and loss, and when distributions will be made.
Upcoming deadline to amend certain BBA partnership returns
While the ability to temporarily file amended returns is welcome by many BBA partnerships, some unanswered questions remain about the consequences of doing so, and in some circumstances filing an AAR could be preferable.
Proposed rules govern carried interests
The IRS issued proposed regulations under Sec. 1061, enacted by the law known as the Tax Cuts and Jobs Act, which requires owners of certain partnership interests to hold them for three years to be eligible for capital gain treatment.
The CARES Act and opportunities to implement changes on previously filed returns
The following discussion mostly focuses on the ability of partnerships to file amended returns and the QIP technical correction under the guidance issued in Rev. Procs. 2020-23 and 2020-25, respectively.
Partnership allocations lacking substantial economic effect
If a partnership’s allocations are not respected, the IRS or the courts can reallocate items of income or loss and assess underpayment or accuracy-related penalties.
Partnership form being redesigned for 2021
The IRS proposes modifying the partnership form (Form 1065) to help standardize the format of international tax items.
Sec. 743(b) adjustments: Shortcuts and surprises
This discussion considers reasons the purchaser of a partnership may want to rethink the use of such shortcuts when estimating the federal income tax consequences associated with a Sec. 743(b) adjustment in an acquired partnership interest.
Partnerships, a pandemic, and Rev. Proc. 2020-23
Partnerships must weigh the benefits of amending returns now that administrative hurdles have been removed.
Tax savings opportunities from the CARES Act
This article summarizes business and individual tax provisions of the CARES Act, emergency legislation designed to speed relief to employers and individuals who are struggling due to the COVID- 19 pandemic.
Deduction limitations of Sec. 162(m) to compensation paid by partnerships in Up-C and UPREIT structures
Proposed regulations change the paradigm for the tax treatment of compensation paid by a partnership situated below a publicly held corporation in an Up-C or UPREIT structure.
Withholding and reporting of partnership distributions to non-US partners
The mechanics of the withholding regime seem straightforward, but they can be difficult for certain tiered partnership structures.
A guide to changing previously filed partnership returns
This article explains the procedures for making adjustments to previously filed partnership returns, a process that changed significantly with the creation of the centralized partnership audit regime.
State considerations when amending BBA partnership returns
This discussion provides a review of the federal filing requirements for amending partnership returns and focuses on three states that have taken varying approaches to address the corresponding state effects of the BBA.
